BOSTON—The Greater Boston industrial market has posted a single-digit vacancy rate for the second quarter in a row, Boston is now a hotspot for life science activities, and indicators for the Boston office market remained positive. This according to a series of reports released this week by Newmark Grubb Knight and Frank.

Industrial Positive Absorption: After dropping to 9.7%, a 10-year low, in fourth-quarter 2014, vacancy dropped another 40 basis points to 9.3% in first-quarter 2015. With no developments recently completed or under construction, this decline in vacancy is a direct result of significant positive absorption across the market.

The positive movement is spread across all Boston submarkets NGKF says.

Absorption in the Central submarket totaled 104,258 square feet. This moved vacancy down 40 basis points, to end the first quarter at 9.5%. The North submarket continued to perform well, posting another 125,000 square feet of absorption this quarter. The South submarket posted 163,727 square feet of absorption during the first quarter, dropping vacancy another 30 basis points to 8.5%. In fact, the South submarket has been on fire in recent years, with more than 4.0 million square feet of positive absorption since 2012.

Life Sciences emerging: The Boston life sciences market continued to scale new heights in the global life sciences market in the first quarter NGKF said, noting that a recent article from The Boston Globe ranked the Greater Boston area as the number- one life sciences market in the United States. Cambridge, a market highly concentrated with life science companies, has been Boston's hottest market over the past few quarters, and life sciences has contributed significantly to that success. Even as space fills up and prices soar in Cambridge, tenants simply move to other parts of the Boston market, rather than to another market altogether.

Mass Innovation Labs' 120,000-square-foot move-in at 675 Kendall Street in Cambridge and Amgen's occupancy of 80,000 square feet at 200 Cambridge Park Drive in Cambridge. The building at 200

Cambridge Park Drive is representative of the flurry of life sciences move- ins taking place in Cambridge. The building was renovated to life sciences use last year.

Although market conditions are positive, the life sciences market vacancy increased this quarter after decreasing for the past few quarters. While possibly the start of a different trend, this bump in vacancy can be largely attributed to Vertex's buyout of its spaces in Cambridge at 40 Erie Street, 200 Sidney Street and 21 Erie Street and the completion of the Longwood Center in Boston. This new construction will add 414,000 square feet of space, most of which is still vacant. This number should.

Office Stands Strong: In the office sector across Boston, close to 500,000 square feet of positive absorption was posted, making this the 16th consecutive quarter of positive absorption, when these quarters are combined they total more than 9.0 million square feet. Quarter-over-quarter, vacancy dropped another 30 basis points to 11.6%, the lowest vacancy rate in 20 years.

As a result of this low vacancy, asking rental rates increased dramatically, up 20.0% on average during the same time frame. Absorption in the Central Business District (CBD) remained positive.

The Back Bay experienced positive momentum, as Blue Cross Blue Shield and Wayfair occupied space at 101 Huntington Avenue and 500 Boylston Street, respectively. However, much of this positive movement was negated as State Street and Liberty Mutual vacated large blocks totaling more than 220,000 square feet at Copley Place and the John Hancock Tower. As the quarter closed, the Back Bay netted just 4,363 square feet of positive absorption.

The Cambridge market has been one of the tightest markets with vacancy in the single-digits and dropping since 2010. At the end of the first quarter, overall vacancy stood at 6.2%.

Increases are occurring in the suburbs, but to a lesser extent. The Inner Suburb submarkets are demanding the highest rents.

Greater Boston currently has some of the most construction activity of anywhere in the United States. At the close of the first quarter, 3.2 million square feet of office space was in various stages of construction. The CBD currently has five properties under construction that total 1.6 million square feet.

As vacancy rates in the Greater Boston area continue to fall, many from record lows, and current demand remains high, vacancy will continue to trend downward. Although inventory is expected to increase by 2.0%, with 3.2 million square feet of new development set to deliver within the next 12 to 18 months, more than 70% of this new inventory is already committed. In the meantime, large blocks of class A space are becoming scarce as landlords continue to raise prices and tenants see a narrowing of asking versus taking rents.